India's sugar production demonstrated strong momentum in the opening quarter of the 2025-26 season, with output surging 23.43% to reach 11.83 million tonnes during the October-December period. This represents a significant increase from the 9.56 million tonnes produced in the corresponding period of the previous year, according to data released by the National Federation of Cooperative Sugar Factories Ltd (NFCSF).

The Indian Sugar Mills Association (ISMA) has also reported similar production trends, with expectations that sugar production will reach 11.90 million tonnes in 2025, compared to 9.54 million tonnes in the previous year, further validating the sector's robust performance.

Production Performance Overview

The robust performance was underpinned by efficient processing operations across the country. As of December 31, approximately 499 mills had crushed 134 million tonnes of sugarcane, achieving an average sugar recovery rate of 8.83%. The strong quarterly performance contrasts with the total output of 26.18 million tonnes recorded for the entire 2024-25 season.

State-wise Production Analysis

Maharashtra emerged as the standout performer, delivering exceptional growth that significantly contributed to the national surge. The state's sugar output jumped 63% to 4.87 million tonnes from 2.99 million tonnes in the year-ago period, reinforcing its position as the country's second-largest sugar producer.

Uttar Pradesh, maintaining its status as India's largest sugar-producing state, recorded steady growth with output increasing to 3.56 million tonnes during the October-December period, compared to 3.26 million tonnes in the corresponding period of the previous year.

Regional Production Highlights

Karnataka also contributed positively to the national growth trajectory, with sugar output rising to 2.21 million tonnes from 2.05 million tonnes in the corresponding period. Among the smaller producing states, Gujarat recorded output of 2.85 lakh tonnes, while Bihar and Uttarakhand produced 1.95 lakh tonnes and 1.30 lakh tonnes respectively during the October-December period.

Season Outlook

The NFCSF has projected total sugar production of 31.50 million tonnes for the complete 2025-26 season, excluding 3.50 million tonnes that will be diverted for ethanol production. This forecast reflects the cooperative body's confidence in sustained production momentum throughout the remaining months of the crushing season. The alignment between NFCSF and ISMA data underscores the consistency in production reporting across industry bodies.

The Indian government has officially permitted exports of organic sugar up to 50,000 tonnes per fiscal year through a recent notification by the Directorate General of Foreign Trade (DGFT). This policy development provides a structured framework for organic sugar exports while supporting the domestic sugar sector through dedicated export opportunities.

DGFT Notification and Regulatory Framework

The DGFT notification establishes clear guidelines for organic sugar exports, stating that "Export of organic sugar... is allowed subject to an overall ceiling of 50,000 tonnes per financial year as per the modalities prescribed by APEDA separately." The exports are subject to the provisions of the Agricultural and Processed Food Products Export Development Authority (APEDA), which will prescribe separate modalities for implementation.

Organic Sugar Standards and Production

Organic sugar is manufactured from sugarcane grown without pesticides and fertilizers, adhering to strict organic farming and processing standards. This specialized production process ensures that the final product meets international organic certification requirements, making it suitable for export to markets with stringent organic food regulations.

Impact on Sugar Industry

The government's decision to create a dedicated export framework for organic sugar reflects the growing global demand for organic food products and India's potential to capitalize on this market segment. The annual allocation system provides predictability for manufacturers and exporters, enabling better planning and investment decisions in organic sugar production capabilities.

This policy announcement is expected to provide a significant boost to the sugar sector, particularly for producers specializing in organic variants. By establishing a separate export pathway with APEDA oversight, the government aims to support and encourage growth in this specialized segment while maintaining regulatory control through the annual limit mechanism.